An outlet spanning more than half a hectare is to be built in Auckland’s northwest at Westgate. Video / Jason Dorday / Alyse Wright
Privately owned real estate business New Zealand Retail Property Group (NZRPG) has secured $235 million in new funding for its Westgate from a group led by Japan’s Nomura on the same day it announced Kmart opening New Zealand’s biggest store at its Auckland hub.
Mark Gunton, principal and founding director of the real estate business, said the new funding would enable him to expand Westgate where it today announced New Zealand’s largest Kmart.
A consortium of global private credit investors, arranged by Nomura, provided the business with a new funding package.
That gives it the necessary financial resources to meet the level of demand from the market for retail, commercial and industrial space as it expands the master-planned town centre on a 52ha site in Auckland’s north-west, Gunton said.
Westgate is one of the four urban nodes within Auckland City as identified in the unitary plan and already comprises extensive retail facilities, including the Westgate Shopping Centre, Northwest mall and the recently opened Costco store, New Zealand’s first.
“We’re very thankful to our major financiers Nomura, and private credit funds managed, respectively, by BlackRock and Tor Investment Management, who have joined together to support the ongoing delivery of Westgate Town Centre, a master plan 20 years in the making,” Gunton said.
Plans for the new Kmart Westgate, with 600 car parks. New fast-food drive-through outlets off Kakano Rd are visible top right. Costco Wholesale is to the top right.
“This deal underscores their confidence in [the group’s] capability as well as the significant further growth potential that exists at Westgate.”
With ongoing growth and the opening of the $100m Costco Wholesale, Westgate is positioned to attract shoppers from beyond its primary catchment, he said.
The total potential identified catchment consists of 1.6 million people. It is projected that the annual retail expenditure within this catchment will reach nearly $25 billion in 2024, he said.
This substantial pool of spending power provides Westgate with significant opportunities.
With such a vast market size, in terms of retail expenditure, Westgate is quickly becoming one of Auckland’s highest-performing retail destinations, Gunton predicted.
Westgate is also the location for large-scale data centres recently built for Microsoft and DCI, with a data centre for Amazon under construction.
Map shows Westgate and all the businesses out there. Kmart's new location is shaded in blue in Zone 06. Map / supplied by NZ Retail Property Group
“The funding we have secured will allow us to immediately commence development of zone six which will include New Zealand’s largest Kmart store, which will operate on a 24/7 basis, together with a mix of quality retail tenants, plus further infrastructure and services that will support Westgate retailers, customers and surrounding residents.”
The property group is also contemplating significant additions to the “outlet” offer within the Westgate Shopping Centre and the development of a substantial “entertainment” precinct.
Kushagra Pant, managing director and head of structured lending for Asia ex-Japan at Nomura, says Nomura has built a strong relationship with the group over many years, assisting the company to deliver high quality real estate across retail precincts and vibrant town centres.
“We are happy to have supported this transaction and NZRPG’s vision for Westgate,” Pant said.
Stephen Allan, managing director and head of Australasia private credit at BlackRock, said: “We are pleased to make our first private credit investment in the New Zealand market, supporting NZRPG with the financing for the Westgate Town Centre development. We believe Westgate is well-positioned to benefit from Auckland’s growing population and urban expansion and become a unique asset in New Zealand’s real estate sector.”
NZRPG is New Zealand’s largest privately owned retail development, investment and property management company with more than 30 years’ experience in developing and managing centres that are vital, vibrant community and commercial hubs.
It is currently undertaking a number of other smaller-scale retail projects at Westgate, including industrial and convenience retail opportunities.
It also owns the Fraser Cove Shopping Centre in Tauranga and the Milford Shopping Centre in Milford Auckland where it also recently developed 63 apartments.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
